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Fact-Checking Obama and Romney on Apple and China

Late in Tuesday night's presidential debate, the candidates made Apple the focal point of the discussion on Chinese labor and outsourced jobs when Barack Obama and Mitt Romney were asked, how, if it all, the United States can entice the company to bring its manufacturing jobs back to the U.S.

China and its trade and business practices have been a hot topic throughout this election and will likely arise once again at the foreign policy-focused third debate early next week. But the question uniquely framed the issue around a the well-known technology company.

Obama and Romney answered the question in very different ways. Romney, first to respond, mostly argued the answer lies in foreign policy: currency reform on the part of China, international patent protection and cybersecurity protection. Obama, meanwhile, stressed the need for domestic reforms in manufacturing and investment into science and research.

Do Romney's claims on China hold true? And do Obama's policies match his rhetoric on science research?

Currency Manipulation

Romney's first claim, that currency manipulation on the part of the Chinese government is driving down the price of Chinese exports, is somewhat true.

The International Monetary Fund has said China's currency, the Yuan, is "substantially undervalued," but now rates it as "moderately undervalued." The Obama administration has called it "significantly undervalued," but has refused to label China as a currency manipulator, language that carries significant weight in international relations and could spark a trade war.

Some commentators, however, say the Yuan is increasing in strength and getting closer to where it ought to be compared to the dollar. The Yuan just this week hit a record high, although some observers say the Chinese government may have pegged its currency higher to give political ammunition to Obama ahead of Tuesday's debate (Romney has pledged to officially label China a currency manipulator on his first day in office, a charge Beijing would likely rather avoid).

Patent Protection

Romney's second claim, that lax patent regulations allow Chinese manufacturers to easily make knock-off versions of American-designed products, is mostly true. American businesses for decades have complained about lax intellectual property protection in China, and those complaints have only increased in the era of code as king, easily duplicated and pirated as it is.

"China's IP system still makes it difficult for both foreign and Chinese companies to compete on a level playing field," U.S. ambassador to China Gary Locke said in April.

American and Chinese officials have been working together to enhance intellectual property rights in China, claiming some success. Meanwhile, though, Chinese firms have been turning the tables, suing major companies, Apple included, for alleged patent infringement.

Cybersecurity

Romney claimed during the debate that China "hack(s) into our computers." True? Yes, depending on your definition of "China."

Cyberattacks from China are both an economic and national security issue: American intelligence officials have publicly said that cyberattacks from within China (and Russia) are a "persistent threat to U.S. economic security," as they often result in the theft of American intellectual property, some of which may be defense-related. Google, Yahoo, Symantec, Adobe and other companies have all been targeted by cyberattacks from within China. And a recent congressional panel investigation warned American businesses against using Chinese-made telecoms components.

It hasn't been made clear, however, if any of these attacks were ordered by the Chinese government, which has denied any involvement in cyberattacks.

Advanced Manufacturing and Research

Obama candidly admitted that "low-wage, low-skilled jobs" were not coming back, and instead stressed the need for investment in advanced manufacturing and research. Does his record match the rhetoric?

The president's most recent proposed budget includes $64 billion for "basic and applied research;" $64.9 billion for non-defense research; $13.1 billion combined for the National Science Foundation, Department of Energy Office of Science and the National Institute of Standards and Technology and other investments. Whether that's enough is up to individual interpretation.

In February, the Obama administration announced an $8 billion community-college focused training program, partially for training workers in advanced manufacturing (some observers believe unemployment remains high not because of a lack of jobs but because of a lack of properly trained workers).

If successful, the program may help those who've lost their low-skill jobs due to outsourcing find new work in a different field. However, a Government Accountability Office report last year found that "little is known about the effectiveness of most [retraining] programs."

Obama was also the first president to create a "Chief Technology Officer" position at the White House, a role that involves assisting the president on technology issues and advocating for technology's potential to improve governance. The job's currently filled by Todd Park.

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